A minister declined to say that a £260,000 payout to former Cabinet Secretary Sir Chris Wormald was “value for money” for the taxpayer.
The ex-top civil servant was reported to have been given the payment under an agreement for his departure from No10.
The Cabinet Office said Sir Chris had left Downing Street under “mutual” agreement between Sir Keir and him.
But he is believed to have been forced out as the Prime Minister seeks to rebuild his No10 team after being rocked by the Lord Mandelson and Lord Doyle storms.
Senior Government officials were said to have refused to sign off the payout for Sir Chris, on the basis that there was a lack of grounds for ousting him.
Sir Keir was said to have needed to make a ministerial direction to push through the payment.
Asked if the payout was value for money, Government minister Emma Hardy told Times Radio: “Well, I wouldn’t want to say whether something was good for value or not.
“I would just say, from my background as a trade unionist, if something is written into somebody’s terms and conditions of employment, then I would say you should honour someone’s terms and conditions of employment.”
She denied that Sir Chris had been “sacked” or that he had been made a “scapegoat” for blunders at the heart of Government including the decision to appoint Lord Mandelson British ambassador to the US despite his ongoing links to paedophile financier Jeffrey Epstein.
The Metropolitan Police is now investigating whether Lord Mandelson committed misconduct in public office by allegedly passing market sensitive information to Epstein when he was Business Secretary in Gordon Brown’s government between 2009 and 2010.
Sir Chris’ contract entitled him to one month’s pay for every year in the Civil Service which he joined around 35 years ago, so he was entitled to the maximum payout of around £260,000, according to The Times.
Sir Keir was starting the process of appointing a new Cabinet Secretary following Sir Chris’ departure after just 14 months in the job.
He is the third senior figure to quit the Government in the past week following Sir Keir’s chief of staff, Morgan McSweeney, and communications director, Tim Allan.
With three senior civil servants now jointly doing the Cabinet Secretary job, two interim chiefs of staff and no communications chief, Conservative shadow minister Alex Burghart said: “Britain isn’t being governed.”
Sir Chris is widely expected to be replaced by Home Office Permanent Secretary Dame Antonia Romeo, viewed by Downing Street as a “disrupter”, despite warnings from her former boss at the Foreign Office.
Lord Simon McDonald said the Prime Minister should start the recruitment process “from scratch” to ensure there was proper “due diligence”.
Dame Antonia previously faced allegations of bullying related to her time as consul-general in New York, but she was later cleared by the Cabinet Office, though reportedly not by the Foreign Office.
Government sources have dismissed Lord McDonald’s claims, saying there was “absolutely no basis for this criticism” and calling him “a senior male official whose time has passed”.
In the meantime, Dame Antonia is one of the three civil servants filling in as Cabinet Secretary, alongside Cabinet Office Permanent Secretary Cat Little and Treasury Permanent Secretary James Bowler.
